Rental Trend Squeezing Affordable Housing Market

Fewer people own their homes, and that’s squeezing the rental market as more families sign leases instead of mortgages.

As the number of available apartments lags behind growing demand, rents are on the rise.

The median cost to rent an apartment in Pennsylvania swelled 5 percent, from $822 to $859 between 2011 and 2016, according to the most recent U.S. Census Bureau data.

The phenomenon appears to have a disproportionate effect on people spending more of their income on rent, data shows.

The U.S. Department of Housing and Urban Development says a family is housing cost-burdened when they spend more than 30 percent of their income on rent.

Half of renting Pennsylvanians fit that description, data shows.

“The issue is that people don’t really make enough to afford housing,” said Phyllis Chamberlain, executive director of the Housing Alliance of Pennsylvania. “It’s people like teachers and firefighters who are unable to afford housing in a place that doesn’t require them to have a really long commute.”

She pointed to data from the Federal Reserve Bank of Philadelphia, which says the state suffers a deficit of nearly 260,900 rental units affordable for the lowest-income families, or those making 30 percent of the median family income or less.

In Lackawanna County, the number of households spending 30 percent or more on rent swelled from 44 percent in 2011 to 47 percent in 2016.

In Luzerne County, the increase was minuscule, less than 1 percent.

Wyoming County saw the greatest increase in cost-burdened residents, with a jump of nearly 10 percentage points in the same time frame to 47 percent.

“We have an affordable rental housing crisis in America,” said HUD Philadelphia regional spokeswoman Niki Edwards in an email. “We need more affordable homes — it’s just that simple.”

After the housing bubble burst and sparked the Great Recession, families lost their homes and were forced to rent. Add to that, the younger generation is delaying home ownership, choosing instead to rent.

Another factor leading to the shortage: more builders and developers favor high-wage earners with new construction, according to a report by the Joint Center for Housing Studies, a collaboration between the Massachusetts Institute of Technology and Harvard University.

Think the dozen or so luxury apartment conversion projects in Scranton and Wilkes-Barre’s downtown areas, or Yalick Farms in Lehman Twp.

“It’s more challenging for developers housing for the lowest income households,” Chamberlain said. “There needs to be some subsidy that’s available so that we make it possible to create housing.”

Charles Jefferson’s development firm transformed several historic Scranton buildings to high-end apartments. From the outside looking in, he said the regulatory hurdles for low income tax incentives are far more rigorous than for typical apartments like his.

“There’s a lot of up front costs,” he said.

His current undertaking, Samters Lofts at Lackawanna and Penn avenues in Scranton where he plans apartments and commercial spaces, received a historic preservation tax credit to give new life to the old building, he said. He had clear parameters to meet in order to get it.

“It’s not that way with low income, it’s a very different process,” he said.